Nvidia vs Japanese Market
The rise of Nvidia has surprised many people in the financial world. Recently, its market cap has touched around $4.2 trillion, which is almost equal to the size of some of the largest economies. To give some context, the entire Japanese market is valued at about $5.3 trillion, and Japan holds the position of the second-largest market in the world after the U.S.
The fact that a single company in the U.S. is coming close to overtaking this massive market raises questions about how sustainable such growth can be.
IMPORTANT ANNOUNCEMENT
From 15th of Aug 2025, we have started sharing all our strategy updates, rebalances, and important announcements on our official WhatsApp Channel.
Why this change?
Because it’s simpler, faster, and right where you already are — WhatsApp makes staying updated effortless.
Stay updated with:
Strategy updates & rebalances
Exclusive announcements & offers
Important reminders – all in one place
Here’s an instruction manual if you are not aware.
Bigger Than Major Economies
What makes this development even more striking is that Nvidia is now bigger than the UK, China, Canada, France, and Germany, and in some cases, even larger than a combination of these economies. This shows how far the stock has come in terms of valuation. But while momentum in the stock market is often exciting, the challenge always lies in whether such valuations can hold up over time.
Learning From the Past
History has given us many lessons about market bubbles and excess valuations. Back in 1989, the Japanese market went into an exponential rise, with valuations reaching unimaginable levels. At that time, it was said that the Imperial Gardens in Tokyo were valued more than the entire state of California. Of course, what followed later was a steep fall, proving how dangerous unsustainable growth can be.
Exuberance and Risk
The current path that Nvidia and some other U.S. stocks are taking reminds many of those earlier excesses. Exuberance in the market can often blind investors to the risks ahead. While it is true that the growth story looks solid at present, it is important to remember that valuations built on momentum alone may not always last. Such extreme growth phases are usually not sustainable forever.
The Importance of an Exit Plan
Despite all these concerns, investors don’t need to panic if they are cautious. The key is to have an exit plan in place. If the market turns, being prepared with a strategy ensures that one is not caught off guard. This way, even if such high valuations face a correction, investors can protect themselves from heavy losses.
Final Thoughts
The extraordinary rise of Nvidia is both exciting and worrying. It reflects the power of innovation and momentum but also highlights the risks of chasing valuations without limits. The big question is whether this growth can continue or if history will once again remind us that no rise lasts forever.
